Correlation Between United States and Fortitude Gold

Can any of the company-specific risk be diversified away by investing in both United States and Fortitude Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United States and Fortitude Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United States Steel and Fortitude Gold Corp, you can compare the effects of market volatilities on United States and Fortitude Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United States with a short position of Fortitude Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Fortitude Gold.

Diversification Opportunities for United States and Fortitude Gold

0.35

Correlation Coefficient

United States  Fortitude Gold

Weak diversification

The 3 months correlation between United and Fortitude is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Fortitude Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortitude Gold Corp and United States is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United States Steel are associated (or correlated) with Fortitude Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortitude Gold Corp has no effect on the direction of United States i.e., United States and Fortitude Gold go up and down completely randomly.

Pair Corralation between United States and Fortitude Gold

Taking into account the 90-day investment horizon United States Steel is expected to under-perform the Fortitude Gold. In addition to that, United States is 2.81 times more volatile than Fortitude Gold Corp. It trades about -0.27 of its total potential returns per unit of risk. Fortitude Gold Corp is currently generating about -0.37 per unit of volatility. If you would invest  565.00  in Fortitude Gold Corp on September 20, 2024 and sell it today you would lose (51.00) from holding Fortitude Gold Corp or give up 9.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

United States Steel  vs.  Fortitude Gold Corp

United States Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Fortitude Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortitude Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Fortitude Gold is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with United States and Fortitude Gold

The main advantage of trading using opposite United States and Fortitude Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Fortitude Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fortitude Gold will offset losses from the drop in Fortitude Gold's long position.

The idea behind United States Steel and Fortitude Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.